THE SPECIAL COURT (TRIAL OF OFFENCES RELATING TO 
TRANSACTIONS IN SECURITIES) ACT, 1992 
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ARRANGEMENT OF SECTIONS 
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SECTIONS 

1.  Short title and commencement. 
2.  Definitions. 
3.  Appointment and functions of Custodian. 
4.  Contracts entered into fraudulently may be cancelled. 
5.  Establishment of Special Court. 
 5A. Distribution of cases amongst Judges of Special Court. 
6.  Cognizance of cases by Special Court. 
7.  Jurisdiction of Special Court. 
8.  Jurisdiction of Special Court as to joint trials. 
9.  Procedure and powers of Special Court. 
 9A. Jurisdiction, powers, authority and procedure of Special Court in civil matters. 
 9B. Powers of the Special Court in arbitration matters. 
10.  Appeal. 
11.  Discharge of liabilities. 

      11A. Power to punish for contempt. 

12.  Protection of action taken in good faith. 
13.  Act to have overriding effect. 
14.  Power to make rules. 
15.  Repeal and savings. 

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THE SPECIAL COURT (TRIAL OF OFFENCES RELATING TO 
TRANSACTIONS IN SECURITIES) ACT, 1992 

ACT NO. 27 OF 1992 

An  Act  to  provide  for  the  establishment  of  a  Special  Court  for  the  trial  of  offences  relating  to 

transactions in securities and for matters connected therewith or incidental thereto. 

BE it enacted by Parliament in the Forty-third Year of the Republic of India as follows:— 

1. Short title and commencement.—(1) This Act may be called the Special Court (Trial of Offences 

Relating to Transactions in Securities) Act, 1992. 

[18th August, 1992.] 

(2) It shall be deemed to have come into force on the 6th day of June, 1992. 

2. Definitions.—In this Act, unless the context otherwise requires,— 

(a) “Code” means the Code of Criminal Procedure, 1973 (2 of1974); 

(b) “Custodian” means the Custodian appointed under sub-section(1) of section 3; 

(c) “securities” includes— 

(i) shares, scrips, stocks, bonds, debentures, debenture stock, units of the Unit Trust of India 
or any other mutual fund or other marketable securities of a like nature in or of any incorporated 
company or other body corporate; 

(ii) Government securities; and 

(iii) rights or interests in securities; 

(d) “Special Court” means the Special Court established under sub-section (1) of section 5. 

3.  Appointment  and  functions  of  Custodian.—(1)  The  Central  Government  may  appoint  one  or 

more Custodians as it may deem fit for the purposes of this Act. 

(2) The Custodian may, on being satisfied on information received that any person has been involved 
in any offence relating to transactions insecurities after the 1st day of April, 1991 and on and before the 
6th June, 1992, notify the name of such person in the Official Gazette. 

(3) Notwithstanding anything contained in the Code and any other law for the time being in force, on 
and  from  the  date  of  notification  under  sub-section  (2),  any  property,  movable  or  immovable,  or  both, 
belonging to any person notified under that sub-section shall stand attached simultaneously with the issue 
of the notification. 

(4) The property attached under sub-section (3) shall be dealt with by the Custodian in such manner 

as the Special Court may direct. 

(5) The Custodian may take assistance of any person while exercising his powers or for discharging 

his duties under this section and section 4. 

4.  Contracts  entered  into fraudulently may  be  cancelled.—(1) If the Custodian is satisfied, after 
such inquiry as he may think fit, that any contract or agreement entered into at any time after the 1st day 
of  April,  1991  and  on  and  before  the  6th  June,  1992  in  relation  to  any  property  of  the  person  notified 
under  sub-section (2)  of  section  3  has  been  entered  into fraudulently  or to  defeat the  provisions  of  this 
Act,  he  may  cancel  such  contract  or  agreement  and  on  such  cancellation  such  property  shall  stand 
attached under this Act: 

Provided  that  no  contract  or  agreement  shall  be  cancelled  except  after  giving  to  the  parties  to  the 

contract or agreement a reasonable opportunity of being heard. 

(2)  Any  person  aggrieved  by  a  notification  issued  under  sub-section  (2)  of  section  3  or  any 
cancellation made under sub-section (1) of section 4 or any other order made by the Custodian in exercise 
of the powers conferred on him under section 3 or 4 may file a petition objecting to the same within thirty 
days  of  the  assent  to  the  Special  Court  (Trial  of  Offences  Relating  to  Transactions  in  Securities)  Bill, 
1992  by  the  President  before  the  Special  Court  where  such  notification,  cancellation  or  order  has  been 

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issued  before  the  date  of  assent  to  the  Special  Court  (Trial  of  Offences  Relating  to  Transactions  in 
Securities)Bill, 1992 by the President and where such notification, cancellation or order has been issued 
on or after that date, within thirty days of the issuance of such notification, cancellation or order, as the 
case may be; and the Special Court after hearing the parties, may make such order as it deems fit. 

5.  Establishment  of  Special  Court.—(1)  The  Central  Government  shall,  by  notification  in  the 

Official Gazette, establish a Court to be called the Special Court. 

(2) The Special Court shall consist of 1[one or more sitting Judges] of the High Court nominated by 
the  Chief  Justice  of  the  High  Court  within  the  local  limits  of  whose  jurisdiction  the  Special  Court  is 
situated, with the concurrence of the Chief Justice of India. 

2[(3) When the office of 3[a Judge of the Special Court] is vacant by reason of absence or leave, the 
duties of the office shall be performed by such Judge of the High Court within the local limits of whose 
jurisdiction the Special Court is situated as the Chief Justice of that High Court may, with the concurrence 
of  the  Chief  Justice  of  India,  nominate  for  the  purpose  and  the  Judge  so  appointed  shall  have  all  the 
jurisdiction and powers of 3[a Judge of the Special Court] including the powers to pass final orders.] 

4[5A.Distribution of cases amongst Judges of Special Court.—Where the Special Court consists of 
two or more Judges, the Chief Justice of the High Court within the local limits of whose jurisdiction the 
Special Court is situated may, from time to time, by general or special order, make provisions as to the 
distribution of cases amongst the Judges and specify the matters which may be dealt with by each of such 
Judge.] 

6. Cognizance of cases by Special Court.—The Special Court shall take cognizance of or try such 

cases as are instituted before it or transferred to it as hereinafter provided. 

7.  Jurisdiction  of  Special  Court.—Notwithstanding  anything  contained  in  any  other  law,  any 
prosecution in respect of any offence referred to in sub-section (2) of section 3 shall be instituted only in 
the  Special  Court  and  any  prosecution  in  respect  of  such  offence  pending  in  any  court  shall  stand 
transferred to the Special Court. 

8. Jurisdiction of Special Court as to joint trials.—The Special Court shall have jurisdiction to try 
any  person  concerned  in  the  offence  referred  to  in  sub-section  (2)  of  section  3  either  as  a  principal, 
conspirator or abettor and all other offences and accused persons as can be jointly tried therewith at one 
trial in accordance with the Code. 

9. Procedure and powers of Special Court.—(1) The Special Court shall, in the trial of such cases, 

follow the procedure prescribed by the Code for the trial of warrant cases before a magistrate. 

(2) Save as expressly provided in this Act, the provisions of the Code shall, in so far as they are not 
inconsistent with the provisions of this Act, apply to the proceedings before the Special Court and for the 
purposes of the said provisions of the Code, the Special Court shall be deemed to be a Court of Session 
and shall have all the powers of a Court of Session, and the person conducting a prosecution before the 
Special Court shall be deemed to be a Public Prosecutor. 

(3) The Special Court may pass upon any person convicted by it any sentence authorised by law for 

the punishment of the offence of which such person is convicted. 

(4)  While  dealing  with  any  other  matter  brought  before  it,  the  Special  Court  may  adopt  such 

procedure as it may deem fit consistent with the principles of natural justice. 

5[9A. Jurisdiction, powers, authority and procedure of Special Court in civil matters.—(1) On 
and  from  the  commencement  of  the  Special  Court  (Trial  of  Offences  Relating  to  Transactions  in 
Securities)  Amendment  Act,  1994  (24  of  1994)  the  Special  Court  shall  exercise  all  such  jurisdiction, 
powers and authority as were exercisable, immediately before such commencement, by any civil court in 
relation to any matter or claim— 

(a) relating to any property standing attached under sub-section(3) of section 3; 

1. Subs. by Act 6 of 1997, s. 2 for “a sitting Judge”(w. e. f. 16-1-1997).  
2. Ins. by Act 24 of 1994, s. 2(w. e. f. 25-1-1994). 
3. Subs. by Act 6 of 1997, s. 2, for “the Judge of the Special Court” (w. e. f. 16-1-1997). 
4. Ins. by s. 3, ibid. (w. e. f. 16-1-1997). 
5. Ins. by Act 24 of 1994, s. 3 (w. e. f. 25-1-1994). 

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(b)arising out of transactions in securities entered into after the1st day of April, 1991, and on or 
before  the  6th  day  of  June,  1992,  in  which  a  person  notified  under  sub-section  (2)  of  section  3  is 
involved as a party, broker, intermediary or in any other manner. 

(2)  Every  suit,  claim  or  other  legal  proceeding  (other  than  an  appeal)  pending  before  any  court 
immediately before the commencement of the Special Court (Trial of Offences Relating to Transactions 
in Securities)Amendment Act, 1994 (24 of 1994), being a suit, claim or proceeding, the cause of action 
whereon it is based is such that it would have been, if it had arisen after such commencement, within the 
jurisdiction of the Special Court under sub-section (1), shall stand transferred on such commencement to 
the Special Court and the Special Court may, on receipt of the records of such suit, claim or other legal 
proceeding,  proceed  to  deal  with  it,  so  far  as  may  be,  in  the  same  manner  as  a  suit,  claim  or  legal 
proceeding from the stage which was reached before such transfer or from any earlier stage or de novo as 
the Special Court may deem fit. 

(3) On and from the commencement of the Special Court (Trial of Offences Relating to Transactions 
in Securities) Amendment Act, 1994 (24 of 1994), no court other than the Special Court shall have, or be 
entitled to exercise, any jurisdiction, power or authority in relation to any matter or claim referred to in 
sub-section (1). 

(4) While dealing with cases relating to any matter or claim under this section, the Special Court shall 
not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be 
guided by the principles of natural justice, and subject to the other provisions of this Act and of any rules, 
the Special Court shall have power to regulate its own procedure. 

(5) Without prejudice to the other powers conferred under this Act, the Special Court shall have, for 
the purposes of discharging its functions under this section, the same powers as are vested in a civil court 
under  the  Code  of  Civil  Procedure,  1908  (5  of  1908),  while  trying  a  suit,  in  respect  of  the  following 
matters, namely:— 

(a) summoning and enforcing the attendance of any person and examining him on oath; 

(b) requiring the discovery and production of documents; 

(c) receiving evidence on affidavits; 

(d)  subject  to  the  provisions  of  sections  123  and  124  of  the  Indian  Evidence  Act,  1872                      

(1 of 1872), requisitioning any public record or document or copy of such record or document from 
any office; 

(e) issuing commissions for the examination of witnesses or documents; 

(f) reviewing its decisions; 

(g) dismissing a case for default or deciding it ex parte; 

(h) setting aside any order of dismissal of any case for default or any order passed by it ex parte; 

and 

(i) any other matter which may be prescribed by the Central Government under sub-section (1) of 

section 14. 

9B.  Powers  of  the  Special  Court  in  arbitration  matters.—(1)  The  Special  Court  shall  have  the 
jurisdiction and powers of a Court conferred under the Arbitration Act, 1940 (10 of 1940) to decide any 
question forming subject matter of a  reference relating to any matter or claim mentioned in sub-section 
(1) of section 9A. 

(2) Every suit or other proceeding (other than an appeal) in relation to any matter or claim referred to 
in  sub-section  (1)  of  section  9A  pending  before  any  Court  and  governed  by  the  Arbitration  Act,  1940          
(10  of  1940),  immediately  before  the  date  of  commencement  of  the  Special  Court  (Trial  of  Offences 
Relating to Transactions in Securities) Amendment Act, 1994 (24 of 1994) shall stand transferred on that 
date to the Special Court. 

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Explanation.—For  the  purposes  of  this  section,  the  expressions  “Court”  and  “reference”  shall  have 
respectively  the  same  meanings  as  defined  under  clauses  (c)and  (e)of  section  2  of  the  Arbitration  Act, 
1940 (10 of 1940).] 

10.  Appeal.—(1)  Notwithstanding  anything  in  the  Code  1[or  the  Code  of  Civil  Procedure,1908             

(5 of 1908) or the Arbitration Act, 1940 (19 of1940)], an appeal shall lie from any  judgment  1[,decree] 
sentence or order, not being interlocutory order, of the Special Court to the Supreme Court both on facts 
and on law. 

(2)  Except  as  aforesaid,  no  appeal  or  revision  shall  lie  to  any  Court  from  any  judgment  1[,decree] 

sentence or order of the Special Court. 

(3) Every appeal under this section shall be preferred within a period of thirty days from the date of 

any judgment, sentence or order of the Special Court: 

Provided that the Supreme Court may entertain an appeal after the expiry of the said period of thirty 
days if it is satisfied that the appellant had sufficient cause for not preferring the appeal within the period 
of thirty days. 

11. Discharge of liabilities.—(1) Notwithstanding anything contained in the Code and any other law 
for  the  time  being  in  force,  the  Special  Court  may  make  such  order  as  it  may  deem  fit  directing  the 
Custodian for the disposal of the property under attachment. 

(2)  The  following  liabilities  shall  be  paid  or  discharged  in  full,  as  far  as  may  be,  in  the  order  as               

under:— 

(a)  all  revenues,  taxes,  cesses  and  rates  due  from  the  persons  notified  by  the  Custodian  under          

sub-section  (2)  of  section  3  to  the  Central  Government  or  any  State  Government  or  any  local 
authority; 

(b)  all  amounts  due  from  the  person  so  notified  by  the  Custodian  to  any  bank  or  financial 

institution or mutual fund; 

(c) any other liability as may be specified by the Special Court from time to time. 

2[11A.  Power  to  punish  for  contempt.—The  Special  Court  shall  have,  and  exercise,  the  same 
jurisdiction, powers and authority in respect of contempt of itself as a High Court has and may exercise 
and, for this purpose, the provisions of the Contempt of Courts Act, 1971 (70 of 1971), shall have effect 
subject to the modifications that— 

(a)  the  references  therein  to  a  High  Court  shall  be  construed  as  including  a  reference  to  such 

Special Court; 

(b) the references to  the  Advocate-General in section  15  of the  said  Act,  shall be  construed, in 
relation to the Special Court, as a reference to the Attorney-General or the Solicitor-General or the 
Additional Solicitor-General.] 

12.  Protection  of  action  taken  in  good  faith.—(1) No  suit,  prosecution  or other  legal  proceeding 
shall  lie  against  the  Central  Government  or  the  Custodian  for  anything  which  is  in  good  faith  done  or 
intended to be done under this Act. 

(2) No suit or other legal proceeding shall lie against the Central Government or any of its officers or 
other employees for any damage caused or likely to be caused by anything which is in good faith done or 
intended to be done under this Act. 

13.  Act  to  have  overriding  effect.—The  provisions  of  this  Act  shall  have  effect  notwithstanding 
anything inconsistent therewith contained in any other law for the time being in force or in any instrument 
having effect by virtue of any law, other than this Act, or in any decree or order of any court, tribunal or 
other authority. 

1. Ins. by Act 24 of 1994, s. 4 (w. e. f. 25-1-1994). 
2. Ins. by s. 5, ibid. (w. e. f. 25-1-1994). 

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14. Power to make rules.—(1) The Central Government may, by notification in the Official Gazette, 

make rules for carrying out the provisions of this Act. 

(2) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it 
is made, before each House of Parliament, while it is in session, for a total period of thirty days which 
may be comprised in one session or in two or more successive sessions, and if, before the expiry of the 
session  immediately  following  the  session  or  the  successive  sessions  aforesaid,  both  Houses  agree  in 
making any modification in the rule or both Houses agree that the rule should not be made, the rule shall 
thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that 
any such modification or annulment shall be without prejudice to the validity of anything previously done 
under that rule. 

15. Repeal  and  savings.—(1)  The  Special  Court  (Trial  of  Offences  Relating  to  Transactions  in 
Securities) Ordinance, 1992 (Ord. 10 of 1992) is hereby repealed. 

(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance, shall be 

deemed to have been done or taken under the corresponding provisions of this Act. 